A friend of mine recently asked me to comment on a conversation he had about business development. During an afternoon on the golf course, one of my friend’s neighbors, a CFO at a public company, was expressing concern about an exchange he just had with the SEC. He was worried. My friend, a transactional lawyer, offered to connect him with a securities specialist at his firm who could help review the filings. Yet the CFO hadn’t called. In fact, my friend just found out his neighbor had opted to hire a competitor instead—one who, according to my friend, charged 200 percent more. “Why?” is what he wanted to know from me, “What did I do wrong?”
After years of interviewing corporate clients about why they hire—and keep working with—law firms, it was clear to me: “You answered the wrong question,” I told my friend. Let’s look at this from both sides:
The Client’s Side (CFO):
Immediate issue: Potential imminent investigation
Latent issue: Unfamiliar with securities filings
Expressed fear, implying need for risk management
Fees were not mentioned
Ultimate need (what to ask for) may be unclear
The Outside Counsel’s Side (Friend):
Trained to spot issues and solve problems
Strong familiarity and comfort level with legal tools as solutions
In tune with client demands for value and price sensitivity
Not always focused on the emotional, operational or risk-related factors that drive client needs
The remedy to overcoming this inside counsel (client)/outside counsel gap is twofold: 1) ask the right questions and 2) key into the business factors driving premium work. Whether formally or informally, taking the time to inquire about the business issues behind a client’s legal problem not only deepens your understanding of the client’s need but also provides a competitive edge.
According to clients, understanding of their business is one of the rarest characteristics they see in their outside counsel. To get at core drivers, ask open-ended questions such as: What motivated you to address this issue now? What is your ideal outcome? Are there others invested in the outcome of this matter? What do you think they will find most helpful? How will they be measuring your success? If you could change any one aspect of this situation, which would you pick first?
This conversation is the first step in building a more comprehensive understanding of the client’s core issue. The second step is knowing how to decipher underlying clues and messages that indicate there may be more to an issue than meets the eye. While the delineation of certain types of matters as premium is somewhat universal, there are other signals that denote the fact that client concerns loom larger than they appear.
Developing an ability to spot these indicators can help attorneys and clients establish a stronger mutual understanding with respect to urgency, priority and relevance. Here is what to look for: 1) Greater complexity and sophistication; 2) precedent-setting matters; 3) time-sensitive, urgent matters; 4) direct alignment with the company’s stated strategic objectives; 5) high financial, reputational or operational risk; 6) high profile—to internal management or external stakeholders; 7) the potential to remove roadblocks to progress; and 8) the ability to generate revenue.
For inside counsel, expressing more clearly the immediate concerns, even those that are more emotional than legal, will help outside counsel better ascertain how they may help you. For outside counsel, asking thoughtful questions that get at legal and emotional needs will help unlock future potential for new matters. In my friend’s case, for example, the client did not know precisely what he needed, yet he was worried. The attorney he ultimately chose to work with responded to that worry with action steps and introductions to better understand the SEC, its processes and the risks associated with investigations.